Whether you’re buying or selling, a crucial part of the process is understanding what conditional and unconditional offers are.
The majority of buyers make ‘conditional’ offers, or offers to buy your home subject to certain requirements being met. These conditions are varied, so it pays dividends to have your solicitor have a close read.
Common conditions included in offers:
- Finance – the contract is only valid if the purchaser manages to obtain a loan for the property.
- Satisfactory building and pest inspection – Due diligence from the buyer may see them offer on the basis that expert reports, such as building reports or title reports, come back clean.
- Subject to the sale of another dwelling – Homebuyers purchasing while waiting for their own home to sell may need to see their own sale go ahead first.
The seller can negotiate the conditions with the buyer. If these conditions are not met in a specified time period, the contract is invalid.
If all the conditions are met then the buyer cannot back out without paying a penalty, so it’s imperative that everyone understands what is required for the sale to occur. The buyer must have gone to appropriate lengths.
It is important to consider the likelihood of each offer succeeding, based on how stringent the requirements are.
In an auction environment, all offers are unconditional unless the buyer has tried to previously negotiate with you.
Outside of auction, unconditional offers can still be made. These can be more appealing as you know there won’t be a reason for the buyer to pull out from the contract. Understandably, offers that have a smaller chance of falling through are more likely to be accepted.
Buyers will usually include a time period for how long the unconditional offer is valid for and are more likely to ensure that they are prepared to purhase on acceptance.